No Need to Panic: Oyedele Allays Fear of Investors Over Capital Gains Tax
- Taiwo Oyedele has said that about 99% of Nigerian stock market investors are exempt from the proposed capital gains tax
- He explained that investors selling shares worth up to N150 million annually, with gains not exceeding N10 million, will not pay CGT
- He added that the tax reforms include incentives aimed at strengthening the capital market and protecting retail investors
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said the federal government’s proposed capital gains tax (CGT) framework will not affect the vast majority of investors in Nigeria’s stock market, noting that more than 99% of participants are exempt.
Oyedele made the clarification during a stakeholders’ engagement with journalists in Lagos, where he explained that the proposed tax reforms were carefully designed to protect retail investors, sustain market liquidity and address what he described as widespread misinformation that has unsettled the equities market in recent weeks.
Source: Original
He explained that investors who sell shares valued at not more than N150 million within 12 months, and whose capital gains do not exceed N10 million, are permanently exempt from CGT without any additional conditions.
He said this threshold alone covers over 99% of investors in the Nigerian capital market, The Sun reported.
“All investors are tax-exempt in the capital markets. 99% of them, the exemption is unconditional. If you sell not more than N150 million worth of shares in a year, with gains not exceeding N10 million, you are permanently exempt,” Oyedele said.
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Pension funds, mutual funds, REITs unconditionally exempt
He added that institutional investors, including pension funds, mutual funds and real estate investment trusts (REITs), are also unconditionally exempt under the framework, further reducing the number of investors that could potentially be liable for CGT.
For the small fraction of investors outside these categories, Oyedele explained that the law allows them to avoid CGT entirely by reinvesting the proceeds from share sales within the market within a specified period.
He said gains from such transactions would remain tax-free if the reinvestment condition is met.
Oyedele stressed that the framework was deliberately structured to avoid measures that could hurt market activity. He said the government intentionally avoided imposing holding-period requirements, noting that evidence from other countries shows such rules often discourage trading and weaken liquidity.
He also dismissed claims that the proposed CGT triggered recent volatility on the Nigerian Exchange (NGX). According to him, available data does not support the view that investors sold shares in reaction to the tax proposal.
Recalling the sharp market decline on November 11, 2025, when the NGX lost about N4.6 trillion in market capitalisation, and the All-Share Index fell by 5.01%, Oyedele said the average transaction size during that session was around N1.16 million, which is far below the N150 million exemption threshold.
He asked, “Why would anybody trading around N1 million panic and sell because of capital gains tax, when they are exempt up to N150 million?”
He stressed that fear-driven narratives, rather than policy fundamentals, fuelled the sell-off and consequent losses in the stock market.
Oyedele noted that Nigeria’s stock market had gained about 45% year-to-date before the controversy, ranking among the top-performing markets globally, including in dollar terms.
He said sustained negative commentary around CGT reversed investor sentiment and contributed to market losses. He also questioned the logic of attributing trillions of naira in market losses to a tax that previously generated about N52 billion in revenue annually.
Source: Facebook
Beyond capital gains tax, Oyedele said the new tax laws include incentives aimed at strengthening the capital market, such as exemptions on bonus shares, stamp duties and withholding taxes.
He added that the proposed reduction of companies' income tax from 30% to 25% is expected to boost corporate profitability and investor returns.
He urged the media and market participants to rely on data and full context when reporting on tax reforms, warning that misinformation could erode confidence and negatively impact ordinary investors.
95% of citizens exempted from paying tax —FIRS
Legit.ng earlier reported that according to the Federal Inland Revenue Service (FIRS), 95% of citizens will be exempted from paying taxes, with the burden shifting to the highest earners under Nigeria’s new tax regime.
The agency said starting January 2036, the FIRS will undergo a name change as part of a broader effort to modernise and create a more business-friendly tax system.
According to the FIRS, the reforms aim to ensure wealthier Nigerians contribute fairly to national development while reducing pressure on low-income groups.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
